The rule: section 21E
If an institution cannot establish and verify identity (or obtain the other required information), it may not establish the business relationship or conclude the transaction, and it must terminate an existing business relationship — and consider filing a report under section 29.
Note who the duty binds: the institution. A FICA hold is not the bank being difficult — it is the bank avoiding an offence. The same section is why no amount of seniority, loyalty or account history can talk an institution out of its own requirements.
The fairness counterweight
The guidance adds process: the client should get a reasonable opportunity to fix the problem and be told the consequences before termination (GN 7A para 135). Institutions must also calibrate requests to risk — and the FIC has long criticised needlessly restrictive document practices. Between those two poles lies your practical room: you cannot make the requirement go away, but you can usually satisfy it another way.
Holds and freezes in practice
The typical sequence at a bank: reminder messages requesting updated documents → a transactional restriction (“account on hold” — deposits may still land, but payments and withdrawals are blocked) → termination/closure if nothing arrives. Business accounts attract the same sequence, with remediation desks dedicated to it. Once the outstanding items are delivered, verification typically completes within days and the hold lifts.
Not every freeze is FICA: fraud flags, disputes and court orders look identical from the outside. The institution’s notice (or its KYC desk) will tell you which regime you are in — ask.
What the institution may ask for
For an individual: whatever identity attributes its RMCP requires — see the documents guide. For a business client under review, requests routinely extend to company registration documents, shareholder and beneficial-ownership information, invoices and contracts, source-of-funds evidence, and proof that account activity matches the disclosed business (the section 21A nature-and-purpose duty at work). Scope objections rarely succeed: under PCC 22A, FICA itself is the POPIA justification for the collection — though collection must stay proportionate to risk.
Fixing it: a practical sequence
- Get the list. Ask the institution for the precise outstanding items in writing — holds often persist because the request went to stale contact details.
- Ask about alternatives. If you cannot produce a listed document, ask what the RMCP accepts instead — many provide substitutes (especially for address proof).
- Deliver everything at once. Partial deliveries restart review queues.
- Confirm the lift. Get written confirmation that verification is complete and the restriction removed.
- If termination happens anyway, the dispute is about process (was the para 135 opportunity given?) rather than the requirement itself — a complaint to the institution, then the relevant ombud scheme, is the route. Legal advice is sensible before escalating.
Frequently asked questions
Yes — it must. If an institution cannot establish and verify identity (or obtain the other required information), section 21E forbids it from opening the relationship or carrying out the transaction, and obliges it to terminate an existing relationship. Restricting transactions ("a hold") is the common intermediate step before termination.
FIC guidance adds fairness to the statute: the client should get a reasonable opportunity to fix the problem and be told the consequences before termination (GN 7A para 135). If your account was restricted without any request reaching you, ask the institution to reissue the outstanding-documents list — stale contact details are a common cause.
No. An institution that waives its own RMCP requirements is breaking the law — which is why “can’t you just skip the FICA?” is never a lawful option, however long-standing the relationship.
No — fraud flags, court orders, garnishee orders and disputes also freeze accounts. If the cause is FICA, the institution’s notice will reference outstanding verification or documents. Asking the institution to identify the legal basis of the hold is a reasonable first step.